case . 1 :07 -cv- ). 04541 document 47 filed 01/23/2008 · case 1 :07 -cv-04541 document 47 filed...

,., .....". ''_ ''' '''' '''''- ).Case 1 :07 -cv-04541 Document 47 Filed 01/23/2008 of 20

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF' ILLINOIS

EASTERN DIVISION

FEDERAL TRADE COMMISSION

Plaintiff Case No. 07 C 4541

Judge David H. Coar

SILl NEUTRACEUTICALS , LLC, and Magistrate Judge Morton Denlow

BRIAN MCDAID, individually and doing business as KA YCON L TD,

Defendants. 'N.....

DEFAULT JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND MONETARY RELIEF AS TO

DEFENDANTS SILI NEUTRACEUTICALS, LLC AND BRIAN MCDAID

On August 13 , 2007 , Plaintiff Federal Trade Commission ("Commission" or "FTC"

pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.

** 53(b) and 57b, and the Controllng thc Assault of Non-Solicited Pomography and Marketing

Act of 2003 ("CAN-SP AM"), 15 U.s. c. g 7706(a), filed a Complaint for fujunetive and Other

Equitable Relief against Defendants Sili Neutraceuticals, LLC ("Sili Neu.traceuticals ) and Brian

McDaid ("McDaid" Defendants were properly sered with the Complaint and a copy of the

summons, and they filed their Answer on October 29 2007.

On Januar 2005 pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, the

Cou.rt entered default against Defendants Sili Neutraceuticals and McDaid. The FTC now has

moved for entry ofa default judgment on all counts of the Complaint against Defendants

pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. The FTC' s Motion lor Entr

Case 1 :07 -cv-04541 Document 47 Filed 01/23/2008 of 20

ITof Default Judgment Against Defendants is hercby granted , and IS THEREFORE

ORDERED, ADJUDGED AND DECREED as follows:

FINDINGS

This Cour has jurisdiction over the subject matter of this case and the paries

hereto.

Venue and service of process are proper.

Defendants have engaged in activities in or affecting commerce, as Hcommerce

is defined in 15 U.S. c. g 44.

This action was instituted by the FTC WlderSections 5 , 12, l3(b) aod 19 ofthe

FTC Act, 15 , 52 , 53(b), 57b and CAN-SPAM, 15 7706(a). Thec. C.

Commission seeks permanent injunctive relief and monetar and other equitable relief for

deceptive acts or practices by Defendants in connection with the sale ofhoodia gordonii and

human growth hormone ("HGH") products and the initiation of commercial e-mail messages in

violation ofCAN-SPAlvL Pursuant to Sections 13(b) and 19, 15 U.s.C. 99 53(b) and 57b, the

FTC has the authority to seek the relief it has requested.

The FTC' s Complaint states a claim upon which relief may be granted against

Defendants under Sections 5 , 12 , D(b) and 19 of the FTC Act, 15 V. * 45 , 52, 53(b) andC.

57b.

Defendants were served with the Complaint and Summons as required by Rule

4(e) and 4(h) of the Federal Rules of Civil Procedure. Defendants appeared in this matter

through counsel.

On August 27 2004, the Court signed a Stipulated Preliminary Injunction Ordcr

With Asset Freeze and Other Equitable Relief. In the Preliminar Injunction, Defendants


stipulated that they "received scrvice of the Complaint, Summons and TRO(.)" Defendants

further stipulated that this Court has subject matter jurisdiction and personal jurisdiction over

Defendants.

On November 6 2007 , the Court adopted the paries ' proposed discover dates

and issued a scheduling order. The Court' s scheduling order required that initial disclosures

pursuant to Fed. R. Civ. P. 26(a)(1) be tendered on or before November 6, 2007. On December

, 2007 Magistrate Judge Denlow granted the FTC's motion to compel Defendants to tender

their initial disclosures, and ordered Defendants to serve their initial disclosures on or before

December 19 2007 or be bared from calling any witnesses or producing any documents in

defense of this case. Defendants stiJ have not tendered their initial disclosures.

On Januar 8 . 2008 . the Cour granted the FTC's motion for entry of default. The

FTC is therefore entitled to a default judgment pursuant to Rule 55(b) of the Federal Rules of

Civil Procedure.

10. The Court now finds that, in connection with the advertising, marketing and sale

of their hoodia products. Defendants violated Sections 5(a) and 12 of the FTC Act , 15 U.S.

g 45(a) and 52 , by falsely representing, expressly or by implication, that:

(A) the boodia products cause rapid and substantial weight loss, including as

much as forty pounds in a month;

(B) the hoodia products eause users to lose safely three or more pounds per

week for multiple weeks;

(C) the hoodia products cause permanent weight loss; and/or

(D) scientjfic research establishes that the hoodia products cause substantial

weight loss.


11. The Court further finds that, in connection with the adverising, marketing, and

sale ofHGH products, Defendants violated Sections 5(a) and 12 of the FTC Act, 15 US.

s* 45(a) and 52, by falsely representing, expressly or by implication, that the HGH products:

(A) contain human growth hormone and/or cause a clinically meaningful

increase in a consumer s growth honnonc levels; and/or

(B) will turn back or reverse the aging process, including, but not limited to

causing such effects as: (i) lowering blood pressure, (ii) reducing cellulite

improving vision, (iv) causing new hair growt, (v) improving sleep,(1i1)

(vi) improving emotional stabilty, (vii) speeding injury recovery, (viii)

relieving chronic pain, (ix) incrcasing muscle mass, and (x) causing fat

and weight loss.

12. The Court further finds that Defendants have initiated the trnsmission, to

protected computers, of commercial e-mail messages that contained, or were accompaned by,

header infonnation that is materiaUy false or materially misleading in violation of Section

5(a)(1) bfCAN-SPAM, 15 D. 7704(a)(I).C.

13. The Court further finds that Defendants have initiated the transmission, to

protectcd computers, of commercial e-mail messages that contained subject headings that would

be likely 10 mislead a recipient, acting reasonably under the eircumstances, about a material fact

regarding the contents or subjeet matter of the message in violation of Section 5(a)(2) of CAN

SPAM , 15 U.S. C. * 7704(a)(2).

14. The Court further finds that Defendants have initiated the transmission of

commercial e-mail messages to protected computers that fail to provide:


(A) clear and conspicuous notice of the opportunity to decline to receive

further commercial electronic mail messages from the sender; and/or

(B) a functioning return e-mail address or other internet-based mechanism

clearly and conspicuously displayed, that a recipient could use to submit a

reply requesting not to receive future commercial e-mail from Defendants,

and that remains capable of receiving such messages for no less than 30

days after the transmission of the original message.

in violation of Sections 5(a)(5)(A)(ii) and/or 5(a)(3) of CAN SP AM, 15 U.S.C. * 7704(a)(5)(A)

and/or 7704(a)(3).

15. The Court further finds that Defendants have initiated the transmission of

commercial e-mail messages to protected computers that fail to provide the senders' valid

physical postal address in violation of Section 5(a)(5)(A)(ii) ofCAN-SPAM, 15 U.S. c.

7704(a)(5)(A)(iii).

16. The Court further finds that Defendant McDaid is the sole offcer of Sili

Neutraceuticals and has formulated, directed, controlled or paricipated in the acts or practices

set forth above. Defendant McDaid is thus individually liable for the violations attrbuted to

Defendant Sili Neutraceuticals described above- See FTC v. Amy Travel Serv. , Inc. 875 F.

564, 573-74 (7th Cir. 1989).

17. It is proper in this case to issue a pennanent injunction prohibiting Defendants

from making, or assisting in making, false or misleading statements or representations with the

advertising, marketing, offering for sale or sale of any good or service, or from furher

violations ofCAN SPAM. See FTC v. Febre 128 F. 3d 530, 534 (7th Cir. 1997); Amy Travel

875 F.2d at 572.

) " - Case 1 :07 -cv-04541 Document 47 Filed 01/23/2008 of 20

18. It is proper in this case to enter equitable monetary relief against Defendants for

consumcr injury causcd by Dcfendants violation of the FTC Act for the deceptive sale of

Hoodia and HGH Products through illegal spam email messages. See Febre 128 F.3d at 534

537 (court may "order repayment of money for consumer redress as restitution" and may order

disgorgement of il-gotten gains to ' 'prevent() thc dcfendant from being unjustly enrched by the

fraud"). The Court finds that the total amount of conswner injury and il-gotten gains caused by

Defendants' violations of the FTC Act and CAN- SPAM Act is $2 569 851.77.

19. Entry of this Order is in the public interest.

DEFINITIONS

Commercial electronic mail message" (or "commercial email" means any

eleetrniemail message the primar purpose of which is the commercial adverisement or

promotion of a commercial product or service (including content on an Internet website for a

commercial pu.rpose)." 15 U.s.C. g 7702(2)(A).

Competent and reliable scientific evidence" means tests analyses, research

studies, or other evidence based on the expertise of professionals in the relevant area, that have

been conducted and evaluated in an objective manner by peTons qualified to do so, using

procedures generally accepted in the profession to yield accurte and reliab1e results.

Defendants means Sili Neutraceuticals, LLC and Brian McDaid. individuaUy

and doing business as KaycQn Ltd.

Document" is synonymous in meanng and equal in scope to the term

defined in Federal Rule ofCiviJ Procedure 34(a)j and incJudes writings, drawings, graphs, chars

photographs, audio and video recordings, computer records, and other data compilations from

which infoTmation can be obtained alld transJated, ifnecessary through detection dcviccs into

" "" " , " Case 1 :07 -cv-04541 Document 47 Filed 01/23/2008 of 20

reasonably usable form. A draft or non-identical copy is a separate document within the

meaning of this tenn.

Electronic mail address means a destination, commonly expressed as a strng

of characters, consisting of a unique user name or mailbox (commonly refelTed to as the ' local

par' ) and a reference to an Internet domain (commonly referred to as the ' domain par'

whcther or not displayed, to whieh an electronic mail message can be sent or delivered." 15

US. C. 7702(5).

Header information" Hmeans the source, destination, and routing infonnation

attached to an electronic mail message, including the originating domain name and originating

electronic mail address, and any other information that appear in the line identifyng, or

purorting to identify, a person initiating the message. " 15 US.C. 7702(8).

UGH Products" shall refer to any products that are advertised , marketed

promoted, offered for sale, distributed, or sold with express or implied representations that the

produ.ct contains any fom of Human Grwth Hormone and/or may cause a statistically

significant and clinically meaningful increase in a consumer s growth honnone levels, and

include, but are n()t limited to Perfect HGH;' " Dr. HGH/' or any other substantially similar

products.

Hoodia Products" shaH refer to any products that are advertised , marketed

promoted, offered for sale, distributed, or sold with express or implied representations that the

product contains any fonn ofHoodia gordonii, and include, but are not limited to

HoodiaHerbal " or any other substantially similar products.

Initiate, when used with respect to a commercial email message, means to

originate or transmit such message or procure the origination or transmission of such message


but shall not include aetions that constitute routine conveyace of such message.... (MJore than

one person may be considcred to have initiated a message. " 15 U. 7702(9).C.

10. MateriaP means likely to affect a person s choice of, or conduct regarding,

goods or services.

11. Person" means a natural person; organization, or other legal entity, including a

corporation, parnerhip, sole proprietorship, limited liabilty company, association, cooperative

or any other group or combination acting as an entity.

12. Procure " when used with respect to the initiation of a commercial email

message, means "intentionally to payor provide other consideration to , or induce, another

person to initiate such a message on one s behalf:' 15 D. 7702(12).C.

13. Protected computer" means a computer which is used in interstate or foreign

commerce or communication, including a computer located outside the United States that is used

in a maner that affects interstate or foreign COl1erce or communication of the United States.

15 U.S. C. 7702(13); 18 C. 1030(e)(2)(B).

14. Sender" when used with respect to a conuereial electronic mail message

means a person who initiates such a message and whose product, service, or Internet Web site is

advertised or promoted by the message. 15 U. 7702(16).c.

PROHIBITIONS AGAINST PRODUCT MISREPRESENTATIONS

IT IS THEREFORE ORDERED that Defendants, and their offcers , agents, servants

employees and attorneys, and those persons or entities in active concert or paricipation with

them who receive actual notiee of this Order by personal service, facsimile, or otherwise


whether acting directly or though any trust, corporation, subsidiar, division, or other device, or

any of them, are hereby restrained and enjoined from making, or assisting others in making,

expressly or by implieation, including through the use of a trade name or endorsement, any fa1se

or misleading oral or written statement or representation in connection with the marketing,

advertising, promotion, offering for sale, sale or provision of any Hoodia- or HGH-related

Products, or any other products or services, including, but not limited to:

Misrepresenting that the Hoodia Products cause rapid and substantia1 weight 10ss,

including as much as forty pounds in a month;

Misrepresenting that the Hoodia Products cause users to lose safely three or more

pounds per week for multiple weeks;

Misrepresenting that the Hoodia Products cause peranent weight loss;

Misrepresenting that scientific research establishes that the Hoodia Products

cause substantial weight loss;

Representing that the HGH Products eontain human growth hormone and/or

cause a statistically significant and clinically meaningful increase in a consumer s growth

hOIDI01le levels;

Misrepresenting that the HGR Products wil turn back or reverse the aging

process, including, but not hmited to, causing effects such as, (i) lowering blood

pressure, (ii) reducing cellulite, (iii) improving vision, (iv) causing new hair growth, (v)

improving sleep, (vi) improving emotional stability, (vii) speeding injur recovery, (viii)

relieving chronic pain, (ix) increasing muscle mass, and (x) eausing fat and weight loss;

Misrepresenting that any product, or any ingredient contained in it, is effective in

the diagnosis, eure, mitigation, treatment , or prevention of any disease;


Making any representation about thc health bcncfits perfonnance

efficacy, or safety of any product u.less, at the time of making such

representation, Defendants possess and rely upon competent and reliable

scientific evidence that substantiates the representation;

Misrepresenting any other fact material to a consumer s decision to purchase any

product; and

Assisting others who violate any provision of Paragraphs A through I of this

Scetion.

II.

PROHIBITIONS AGAINST VIOLATIONS OF CAN-SPAM

IT IS FURTHER ORDERED that Defendants and their offcers, agents, servants

employees, and attomeys, and those persons or entities in active concert or paricipation with

them who receive actual notice of this Order by personal service, facsimile, or otherise

whether acting directly or through any trst , corporation, subsidiar, division, or other device, or

any ofthcm are hereby restrained and enjoined from violating, or assisting others in violating,

the provisions contained in Sections 5 and 6 of CAN SP AM, as currently promulgated or as it

may hereafter be amended, or any rule, regulation, or requirement adopted pursuant thereto

inc1uding, but not limited to, initiating the transmission of a commercial email message that:

Contains, or is accompanied by, materially false or materally misleading

header information;

Contains subject headers that misrepresent the content or subject matter of the

message;


Fails to include a clear and conspicuous notice of the opportunity to decline to

rcccive further electronic mail messages from the sender; or

Fails to include a valid physical postal address of the sender.

III.

EOUIT ABLE MONETARY RELIEF

IT IS FURTHER ORDERED that

Judgment is hereby entered against Defendants, jointly and severlly, in the

amount of two million, five hundred and sixty nine thousand, eight hundred and fifty one

dollars and seventy seven cents ($2 569 851.77) as equitable moneta relief for

violations of the FTC Act and the CAN-SPAM Act. This monetar judgment shall

become immediately due and payabJe by Dcfendants upon entr of this Order, and

interest eomputed at the rate prescribed under 28 US.C. 1961(a), as amended, shaH

immediately begin to accrue on the unpaid balance.

jUp"' ct:i 'ih 111 he m:!dahy r.P.1f1eil "A.98Ir her:m8flt3 under t1:ill ay

e8 ftlnd ble te 8:d ddivaeii tn th r01:1"1;1cm or by wire transf

81d w lm di t;I" UOh! pi 0 tI;dt;J by lhe ()'Idlll ;un:

All funds paid pursuant to this Section shall be deposited into a fund administered

by thc FTC or its agent to be used for equitable relief, including, but not limited to

consumer redress and any attendant expenses for the administration of any redress fund.

In the event that direct redress to consumers is wholly or partially impracticab1e or funds

remain after redress is completed, the FTC may apply any remaining funds for other

equitable relief (including eonsumer infonnation remedies) as it detennines to be

reasonably related to the Defendants ' practices alleged in the Complaint. Defendants


shall have no right to challenge the FTC' s choice of remedies under this Subsection. The

Commission, in its sale discretion, may use a designated agent to administer consumer

redress. This judgment for equitable monetar relief is solely remedial in nature and is

not a fine, penalty, punitive assessment, or forfeiture.

IV.

ASSETS HELD BY THIRD PARTIES

IT IS FURTHER ORDERED that Defendants shall have no right, title and interest to

approximately $300 000 in assets frzen pursuant to Section V ofthe Stipulated Preliminar

Injunction entered by the Court on August 27 , 2007 , including assets held by Ban of Amerca

Central Bancard, Citadel Federal Credit Union. PayPal, and Scottrade. In order to parially

satisfy the monetar judgment set forth in Section III above, any tinaneial or brokerage

institution, escrow agent. title company, commodity trading company, automated clearng house

nctwork transaction processor, business entity, or person that holds, controls, or maintains

custody of any account or asset of, on behalf of, or for the benefit of, the Defendants, including

Bank of America, Central Bancard, Citadel Federal Credit Union, PayPal , and Scottrade, shan

tum over such account or asset to the CommissioD within tel (10) business days of reeeiving

notice of this Order by any means, including, but not limited to, via facsimile.

COMPLIANCE MONITORING

IT IS .FURTHER ORDERED that, for the purose of monitoring and investigating

compliance with any provision of this Order:

Within ten (10) days ofreccipt of written notice from a representative of the

Commission. Defendants each shall submit additional written reports, sworn to or


affirmed under penalty ofpetjury; produce documcnts for inspection and copying; appear

for deposition; and/or provide entry during nonnal business hours to any business

location in such Defendant's possession or direct or indirect control to inspect the

business operation;

The Commission is authorized to monitor compliance with this Order

by all other lawful means , including but not limited to the following:

obtaining discovery from any person, without further leave of Court, using

the procedures prescribed by Fed. R. Civ. P. 30 36 and 45; and

posing as consumers and suppliers to Defendants; any of Defendants

employees, or any other entity managed or controlled in whole or in par

by any Defendant, without the necessity of identification or prior notice;

and

Defendants shall penuit representatives of the CommissioTl to interiew any

employer, consultant, independent contractor, representative, agent, or employee who

has agreed to such an interview, relating in any way to any conduct subject to this Order.

The person interviewed may have counsel present.

Provided, however, that nothing in this Order shall limit the Commission s lawful use of

compulsory process, pursuant to Sections 9 and 20 of the FTC Act 15 U.s.C. * , 57b- , to

obtain any documentary material , tangible things, testimony, or infonnation relevant to unfair or

deceptive acts or practices in or affecting commerce (within the meaning of 15 U.S. C.

45(a)(1 )).


VI.

COMPLIANCE REPORTING BY DEFENDANTS

IT IS FURTHER ORDERED that, in order that complianee with the provisions of this

Order may be monitored:

For a period of three (3) years from the date of entr of this Order

Defendant Brian McDaid shall notify the FTC of the following:

(a) Any changes in residenec, mailing addresses and telephone

numbers, within ten (to) days of the date of such change;

(b) Any changes in employment status (including self-employment)

and any change in the ownership in any business entity within ten

(10) days of such change. Such notice shall include the nae and

address of each business Defendant is affiliated with or employed

by, creates or fOTIs, or performs services for; a statement of the

nature of the business, and a statement of Defendant' s duties and

responsibilities in connection with the business or employment;

and

(c) Any changes in the Defendanfs name or use of any a1iases or

fictitious names; and

Defendant McDaid shall notify the Commission of any changes in

corporate structure 0 f any business that he directly or indirectly controls

or has an ownership interest in, that may affect compliance obligations

arsing under this Order, including but not limited to a dissolution

assignment, sale, merger, or other action that would result in the


emergence of a successor entity; the creation or dissolution of a

subsidiary, parent, or affliate that engages in any acts or practices subject

to this Ordcr; the fiing of a banptcy petition; or a change in the

corporate name or address , at least thirt (30) days prior to such change

provided that with respect to any proposed change in the corporation

about what Defendant learns less than thirty (30) days prior to the date

such aetion is to take place, Defendant shall notify the Commission as

soon as is practicable after obtaining such knowledge.

One hundred cighty (180) days after the date of entry ofthis Order, Defendants

shall provide a wrtten report to the Commission, swom to under penalty of

perjury, setting forth in detail the manner and fonn in which each Defendant has

complied and is complying with this Order. This report shall include, but not be

limited to:

For Defendant McDaid:

(a) His then-current residence address, mailng address, and telephooe

numbers;

(b) His thcn-current employment and business addresses and

telephone numbers, a description of the busjness activities of each

such employer or business, and the title and responsibilities of

Defendant McDaid for each such employer or business; and

(e) Any other changes required to be reported under subparagraph A

of this Section.

For both Defendants:


(a) A copy of each acknowledgment of reeipt of this Order obtained

by Defendants pursuant to Section VII; and

(b) Any other changes required to be reported under subparagraph A

of this Section.

For the purposes of this Order, Defendants shall) unless otherwise directed by the

Commission s authorized representatives, mail al1 written notifications to the

Commission to:

Associate Director of Enforcerent Federal Trade Commission 600 Pennsylvania Ave. ) N. Washington, D.C. 20580 Re: FTC v. Sil Neutraceuticals 07 C 4541 (N.D. Ill.)

For purposes of the compliance reporting required by this Section, representatives

of the Commission arc authorized to eommunicate directly with Defendant unless

Defeodant indicates that he is represented by counsel and provides the name and address

of such eounsel to the Commission.

VII.

MONITORING COMPLIANCE WITH SALES PERSONNEL

IT IS FURTHER ORDERED that Defendants, in connection with any business in

which: (1) any Defendant is a majority oWner of the business or directly or indirectly manages or

controls the business; and (2) the business is engaged in, or assists other in engaging in, the

offcring for sale or salc of any produet or service over the Internet, are hereby pennanently

restrained and enjoined from:


Failing to take reasonable steps sufficient to monitor and ensure that all

employees and independent contractors engaged in sales or other customer service

functions comply with Sections I and II of this Order;

Failing to investigate promptly and fully any consumer complaint received by any

business to which this Section applies; and

Failing to take corrective action with respect to any sales person whom any

Defendant determines is not complying with this Order, which may include

training, disciplining, and/or terminating such sales person.

VIII.

DISTRIBUTION OF ORDER BY DEFENDANTS

IT IS FURTHER ORDERED that, for a perod of thee (3) years from the date of entry

Qfthis Order, Defendants shall deliver a copy of this Order as directed below:

Corporate Defendant; Defendant Sili Neutraceuticals must deliver a copy of

this Order to all of its principals , offcers , directors, and managers. Defendant Sili

Neutraceuticals must also deliver copies of this Order to all of its employees, agents , and

representatives who engage in conduct related to the subject matter of the Order. For

current peroID1el , delivery shall be within five (5) days of service of this Ordcr upon

Defendant. For new personnel , delivery shaH occur prior to them assuming their

responsibilities.

Individual Defendant as Control Person: For any business that Defendant

MeDaid controls , directly or indirectly, or in which Defendant McDaid has a majority

ownership interest. the Defendant must deliver a copy of this Order to an principals

officers, directors. and managers ofthat business. Such Defendant must also deliver


copies of this Ordcr to all cmployees, agents, and representatives of that business who

engage 1n conduct related to the subject matter of the Order. For CUITent personnel

delivery shall be within five (5) days of service of this Order upon the Defendant. For

new personnel , delivery shall occur prior to them asswuing their responsibilities.

Defendant as employee or non-control person: For any business where

Defendant McDaid is not a controllng person of a business but otherise engages

conduct related to the subject matter of this Order. the Defendant must dehver a copy of

this Order to all principals and managers of such business before engaging jn such

conduct.

Defendants must secure a signed and dated statement acknowledging receipt of

the Order, within thirty days of deliver, from an persons receiving a copy of the

Order pursuant to this Section VII.

IX.

RECORD KEEPING PROVISIONS

IT IS FURTHER ORDERED that, for a period of eight (8) years from the date of entry

of this Order, in connection with any business jn which Defendant McDaid is the majority owner

of the business or directly or indireetly manages or controls the business, and where (2) the

business js engaged in, or assists others in engaging in, the offering for sale or sale of any

product or service over the Interet, the Defendant and his agents, offcers, corporations

successors, and assigns, and those persons in active concert or paricipation with him who

receive actual notice of this Order by perona1 serice or otherwise, ar hereby restrained and

enjoined from failing to create and retain the foHowing records:


Accountlng records that reflect the cost of goods or serices sold , revenues

generated, and the disbursement of such revenues;

Records accurately reflecting: the name, address, and telephone number of each

person employed in any capacity by such business, including as an independent

contractor; that peron s job title or position; the date upon which the person

commenced work; and the date and reason for the person s terination, if

applicable;

Customer fies containing the names, addresses, telephone nwnbers, dollar

amounts paid, quantity of items or services purchased, and description of items or

services purchased, to the extent such infonnation is obtained in the ordinar

course of business;

Complaint and refund requests (whether received directly, indirectly, or though

any third party), and any rcsponses to those complaints or refud requests; and

Copies of all sales scripts, training materials, advertisements, or other marketing

materials.

ACKNOWLEDGMENT OF RECEIPT OI- ORDER BY DEFENDANTS

IT IS FURTHER ORDERED that each Defendant, within five (5) business days aftcr

receipt by this Order as entered by the Court, must submit to the Commissjon a truthful sworn

statement acknowledging receipt of the Order.


XI.

ENTRY OF THIS JUDGMENT

IT IS FURTHER ORDERED that, as there is no just reason for delay of entry of this

judgment, pursuant to Fed. R. Civ. P. 54(b). the clcrk shall enter this Order immediately-

XII.

RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jursdiction over this matter

for all purposes.

IT IS SO ORDERED , this (day of

Honorable avid H. Coar United States Distrct Judge

Respectfully submitted by;

Stcven M. Wcmikoff Marissa J. Reich Federal Trade COl1ission 55 W. Monroe 81. , #1825 Chicago , IL 60603 (3) 2) 960-5634 (Telephone) (312) 960-5600 (Facsimilel

case . 1 :07 -cv- ). 04541 document 47 filed 01/23/2008 · case 1 :07 -cv-04541 document 47 filed...

Documents